Majority supports index modulation

Index tranches will be fixed at 2.5% for three years in advance and be paid once a year, the chamber of deputies decided in a vote on Thursday.

14.03.2012

(CS) Index tranches will be fixed at 2.5% for three years in advance and be paid once a year, the chamber of deputies decided in a vote on Thursday.

A majority of 53 voted in favour, while six deputies voted against the new law. This means that at least 12 months will pass between index tranches, likely to be paid in the month of October until 2014. In case of lower inflation more time might pass between index payments.

At the meeting Premier Jean-Claude Juncker highlighted that this was not a move against indexation, but just a change in its regulation.

Without the new law, Claude Haagen from the LSAP explained before the vote, the next index tranche would likely have to be paid out in the first week of February.

The last index was paid out some four months ago. The government had previously said it was unable to cope with the payment of index tranches at this rate, leading to the proposed change.

Haagen commented that it was necessary to give companies planning security and stability to the state.

Furthermore, the new plans included measures to support disadvantaged households, such as vouchers for school books, competitive water prices, social housing, the “allocation vie chère”, and a raise in minimum wage at the beginning of 2013, said Haagen.

Still, the session was marked by strong debate with many voices speaking out against the new law, which had been proposed without the support of unions, after they boycotted the Tripartite meeting last December.

Criticism was also voiced in regards to Luxembourg's financial politics, the state's reliability on the finance sector, as well as the pension system, and the Grand Duchy's competitiveness.

At the beginning of the session, Déi Lénk deputy Serge Urbany had motioned to strike the index vote from the agenda, saying that indexation changes were only possible under very specific economic circumstances, which he did not see given at this point. While Urbany spoke of a Coup d'Etat the motion was refused by the other deputies.

The parliamentary session was the last for outgoing economy minister Jeannot Krecké, who was thanked especially for his work promoting Luxembourg abroad.